Provides an exemption from participation in work activities for certain applicants or recipients of public assistance

Summary of provisions

Section 1 of the bill would amend SSL § 332 (d) to allow for a parent or other relative of a child up to age two to be exempt from welfare work requirements for a maximum period of twelve.

Existing law

SSL § 332 (d) currently provides that a parent or other relative of a child under one year of age shall not be required to participate in work activities for a maximum period of twelve months, only three months of which shall be attributable to anyone child, except as otherwise extended up to the twelve month period by the social services official to be.

Prior legislative history

This is new legislation

Statement in support

New York State has a $55 million early childhood education budget gap for SFY 2011-12. Across the state, local districts' children and families are facing the loss of subsidized child care. New York City announced a cut of 17,000 child care subsidies. During these difficult economic times, subsidized early childhood education programs play an especially vital role in helping families to maintain or find employment. A loss of $55 million could result in a loss of capacity to serve 6,000 children. These cuts will continue eroding the capacity and quality of New York State's early care and education infrastructure for years to come.

This bill would temporarily modify work requirements for welfare recipients who are single parent heads of households (SPHH) to significantly reduce spending on TANF child care subsidies. The exemption would protect non-TANF child care subsidies from cuts and allow the working poor to remain in their jobs. This is consistent with New York's position on helping the working poor and protecting safety-net programs.

New York Social Services Law already provides exemptions from welfare work requirements for individuals caring for an ill or incapacitated person or in their last month of pregnancy or they themselves are ill or have a child under 12 months of age, only three months of which is attributable to anyone child, unless extended.

Child care subsidies need to be preserved for children's educational and social development and to support parents' ability to maintain their jobs. Hundreds of low-income families across the state have already lost and will continue to lose critically needed subsidies that serve as a linchpin in parents' ability to secure and maintain jobs.

Budget implications

It is anticipated that this bill would be a cost savings.

The savings reflected below are based on data from OTDA and OCFS. Please note - this is 2009 data.

If New York allows an exemption up to age two:

o Gross savings if single-parent heads of households (SPHH) with children under age two are exempted, with full exemptions: $73,724,208

o Savings if SPHH with children under age two are exempted, assuming 40% opting out of the exemption by PA employed households: $44,234,524**

These are the numbers used to calculate savings above:

Number of TA recipients receiving childcare

62,928 Families With Average Child Annual Under Child One Care Costs Gross Savings Minus 40%** Net Savings

3,713 7,368,00 27,357,384.00 10,942,953.60 16,414,430.40

Families Average With Annual Child Child Under Care Two Costs Gross Savings Minus 40%** Net Savings

10,006 7,368,00 73,724,208.00 29,489,683.20 44,234,524.80

**(Assumes PA-employed individuals would not receive the exemption or would opt out)

This is a conservative estimate for several reasons. First, the cost per slot used ($614 per month) is the average for children under 5 and infant care is the highest of all child care slots. For example, the infant rate for center-based care in New York City is $338 per week ($1,453/mo) and $160 per week ($688/mo) in a family day care home.

Additionally, the state of California enacted a similar provision and estimated a $376.8 million annual savings which was comprised of $215.3 million in child care savings plus $161.5 million of employment services savings through the elimination of the connected work program expenses (e.g. expense of the workfare or soft skills program). Administrative savings account for about 42% of the total savings achieved in California. If we assume the same percentage for administrative savings in New York, we could produce an additional $12 to $33 million in savings depending on which upper age limit is adopted.

Following the California budget methodology assumption, we estimated a full take up rate for those exempted. California legal advocates state that these assumptions have proven to be correct and almost all eligible recipients were waived. California achieved this via implementation by opting eligibles in; those not wanting the exemption would request an 'opt out'.

Analysis of potential impact to the federal welfare participation rates: In calculating the work rate, the federal Temporary Assistance for Needy Families (TANF) law allows states to exempt households with children under age 1. For children under age 2, a state can exempt families with children over age 1 although the TANF law does not exclude them in calculating the work participation rate. New York has met the work participation rate in recent years and its target participation rate requirement through 2011 is about 35.8%. New York can avoid affecting its participation rate by creating a "separate state program" for these newly exempt families. If New York does not create a separate state program, and in the unlikely event that New York was not able to meet its participation rate, New York could correct the noncompliance with a "corrective compliance plan." Furthermore, the federal penalty may be reduced if the state meets the definition of a "needy state" -- related to high unemployment or food stamp caseload growth.

Two final notes: New York State would not experience a back-end loss in tax revenue for the PA employed population. According to OTDA's December monthly report, the average gross monthly income for SPHHs was $842 per month after application of disregards, which equates to $10,104 per year. Take the following into consideration. New York tax payers receive a standard deduction, a personal exemption per child and a household credit. This means that the first $11,500 of a SPHH's income is exempt from taxes. The population of PA employed individuals who would qualify for a work-exemption under our proposal mostly earn too little to have to pay New York State taxes each year.

There is substantial evidence that high quality early childhood education has great benefit to individual families and society at large. A 2004 report by Legal Momentum and the MIT Workplace Center, "Early Childhood Education for All: A Wise Investment," found that every dollar invested in early childhood programs saves taxpayers $13 in future costs. A few benefits of making high quality programs available to all children include: reduced costs for remedial education, increased school performance, and a foundation that sets young students on the path to earning higher income levels as adults.

Effective date

This act shall take effect immediately and shall expire and be deemed repealed on July 31, 2013.